The FASB is moving closer to issuing a proposal to require certain crypto assets be measured at fair value.
In under a minute
- On Dec. 14, 2022, the Financial Accounting Standards Board (FASB) tentatively decided that an entity with holdings of crypto assets that are measured at fair value – for example, bitcoin and ether – should record changes in fair value through net income. The FASB also concluded holdings of crypto assets should be presented separately from other intangible assets on the balance sheet and changes in fair value of crypto assets should be presented separately in the income statement. Separate disclosure requirements also would apply to crypto assets.
- The FASB’s latest decisions follow on the heels of its October 2022 meeting where the FASB concluded entities with holdings of crypto assets in the scope of the project should be measured at fair value at each reporting period determined using the principles in Topic 820, “Fair Value Measurements.”
- In an August 2022 meeting, the FASB concluded the scope of its project would focus on fungible crypto assets and crypto assets that don’t convey a right to a good or service, ruling out the use of fair value for non-fungible tokens (NFTs) and utility tokens.
- The FASB plans to meet in early 2023 to discuss transition provisions and scope refinements, after which it will issue an exposure draft for public comment.